PROFITABILITY INDICES as tools for FINANCIAL CONTROL.

One of the factors of interest in the exploitation of the agricultural sector worldwide, nationally, regionally and locally, is to know exactly the profitability levels of this activity, since it is a very important indicator for those who wish to enter this type of activity as well as for those who are already immersed in it.

Nowadays there are a large number of livestock entrepreneurs who do not know exactly and much less precisely how much they are earning or how much they are losing through the different mechanisms of animal and vegetable production.

This is largely due to the lack of managerial action that promotes the establishment of strategic, operative plans and goals in the short, medium and long term, with clear and well-defined objectives, which allow them to determine at a financial level an income capacity through an already elaborated structure, as well as the costs and expenses incurred in a production cycle.

That is why it is so transcendental to be able to carry out the application of these actions where it is assumed the adequacy of several administrative-financial controls that lead to the setting of multiple price levels on the different items, accurately in order to be able to project the profitability margins at the end of the financial year.

Every administration in charge of a company has the duty and responsibility to develop and apply strategies that serve to know the economic and financial situation through the accounting information that generates the record of its operations.

That is why profitability is a measure where financial efficiency is evidenced and allows the owners or proprietors a particularity to make investments that contribute to the development and transformation of the company, as well as allowing them to evaluate objectively if the decisions made in the past were the right ones and should remain in force or should be adjusted.

Therefore, it is very important to establish that every organization must focus on profitability as a primary and fundamental objective for its growth, as well as for its development and expansion of the activity it is carrying out..

Taking into account the above mentioned, profitability represents an economic objective of great importance for the company, since it evaluates the performance on investment decisions and its managerial action, but to achieve this objective it is necessary that the organization applies controls on the proper management of finances, in order to determine the true financial, administrative and economic situation of the company through the analysis of the financial statements.

To conclude we say then that the economic profitability can be considered as a measure of the capacity of the assets of a company to generate value with autonomy, which allows to make comparisons of profitability with other companies of the same branch to evaluate which decisions were more successful and where to make better investments..